How 15-day planned strike by Total Gabon oil workers could impact the country’s economy

PUBLISHED: Thu, 28 Jun 2018 19:59:05 GMT

By Francois Conradie, Head of Research at NKC African Economics

Workers at Total Gabon, members of the National Organisation of Petroleum Employees (Onep), have issued a statement saying they plan to go on a 15-day strike from Saturday, June 30.

Their demands are unpaid bonuses, a reduction in the number of foreign workers and some reassurances about job security. The statement, which was issued on Monday, June 24, follows an all-hands meeting held on June 19 in Port-Gentil at which union representatives raised some of these issues.

The strike has the potential to disrupt oil production and, if it is extended beyond the planned 15 days, to affect Gabon’s overall economy.

Nor are the Onep workers the only ones planning a strike. Civil servants are deeply unhappy about a press conference held on Monday at which Ike Ngouoni, a spokesman for President Ali Bongo, announced a plan to cut wages for government workers.

Government wants to try to conform to guidelines from the Economic and Monetary Community of Central Africa (Cemac) that the public sector wage bill should equal 35% of government revenues, rather than the 59% that they currently represent in Gabon.

Salaries for workers earning more than CFAFr2m a year are being cut by 15%, another effort is being made to eliminate a ghost worker problem, operating budgets are being cut by between 5% and 15%, and staff numbers are to be slashed in all departments.

Mr Ngouoni said that government intended to save CFAFr70bn a year or more by means of these initiatives. In response, Jean-Remi Yama, chairman of Unitary Dynamic, the biggest trade union in Gabon, threatened “radical action” in response, saying that the government should have started by cutting the number of political appointees.
Research academics at the University of Science and Technology of Masuku have been on strike since Friday, June 22, demanding payment for overtime worked last year and efforts to address operating issues at the university. They have also indicated their refusal to work any more overtime.

One bit of good news on the same day was the announcement that a four-month strike by court clerks had come to an end, promising some relief for the overstretched prison system.

The trade union movement in Gabon is historically a combative one and strikes are common. However, it has been a while since there was labour action in the crucial petroleum sector. The efforts by Total to solve workers’ problems are important here.

There is also some risk that these demands from unions could begin to overlap with co-ordinated civil society action in response to cost of living concerns, as fuel and inflation prices have been increasing.
Moreover, while civil servants are upset about potential salary cuts and layoffs, fiscal consolidation is and should continue to be a top priority for the government.

The country has run into substantial domestic and external arrears lately and more control over the wage bill is one of the key areas where the government hopes to optimise fiscal policy.

Spending should be kept in check, especially as uncertainty looms in the hydrocarbons sector due to volatile oil prices and maturing oil fields, which could put pressure on future revenue collection.

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